What Drives Natural Gas Consumption in Europe? Analysis and Projections

Özge Dilaver, Zafer Dilaver () and Lester Hunt
Additional contact information
Özge Dilaver: Centre for Research in Social Simulation (CRESS), Department of Sociology, University of Surrey, and British Institute at Ankara, Turkey

No 143, Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) from Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey

Abstract: Natural gas is an important fuel source for Europe and it is expected to remain so in the near future. The market power of suppliers is an important structural element of the European natural gas market and long-term investment and contracts necessitate reliable projections of natural gas demand. This research attempts to address this need. It investigates the impact of income, real natural gas prices and the underlying energy demand trend (UEDT) on OECD-Europe natural gas consumption by applying the structural time series technique to annual data over the period 1978 to 2011. The results suggest that, in order of importance, income, the UEDT and natural gas prices all play a role in driving OECD-Europe natural gas consumption with the estimated UEDT having both increasing (gas using) and decreasing (gas saving) periods over the estimation period and the estimated long run income and price elasticities being 1.19 and -0.16 respectively. Furthermore, based upon the estimated relationship, OECD-Europe natural gas consumption is predicted to be somewhere between 572 and 646 bcm (about 472 and 533 mtoe) by 2020.

Keywords: OECD-Europe Gas Demand; Structural Time Series Model (STSM); Gas Demand Modelling and Future Scenarios. (search for similar items in EconPapers)
JEL-codes: C22 Q41 Q47 Q48 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2013-10
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published in Journal of Natural Gas Science and Engineering 19, 2014, pp. 125–136. (Revised Version)

Downloads: (external link)
https://repec.som.surrey.ac.uk/seeds/SEEDS143.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sur:seedps:143

Access Statistics for this paper

More papers in Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) from Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey Contact information at EDIRC.
Bibliographic data for series maintained by Mona Chitnis ().